{"title":"Patented Innovation and Firm Value in the U.S. Food and Drink Industry: The Economic Importance of High-Quality Product Innovation","authors":"J. Grashuis, S. Dary","doi":"10.1515/jafio-2017-0002","DOIUrl":null,"url":null,"abstract":"Abstract We use patent data to study product, process, and marketing innovation in the food and drink industry. From 1994 to 2005, only 61 of 194 U.S. public food and drink manufacturers patented some type of innovation. Furthermore, we find patent ownership is most common to large corporations, and most patented innovations relate to new designs and processes as opposed to new products. According to our empirical panel analysis, however, stock market investors find patent ownership of new product innovations the most valuable, although the intensity of patent ownership is not of utmost importance. Instead, we conclude patent quality is better able to explain variability in the stock market valuation of U.S. food and drink manufacturers. Specifically, a one-percent increase in the quality of patented innovations in food and drink products facilitates a 0.07 % increase in firm value, corresponding to almost $6 million for the mean innovating firm in the U.S. public food and drink industry.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2017-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2017-0002","citationCount":"6","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Agricultural and Food Industrial Organization","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1515/jafio-2017-0002","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Business, Management and Accounting","Score":null,"Total":0}
引用次数: 6
Abstract
Abstract We use patent data to study product, process, and marketing innovation in the food and drink industry. From 1994 to 2005, only 61 of 194 U.S. public food and drink manufacturers patented some type of innovation. Furthermore, we find patent ownership is most common to large corporations, and most patented innovations relate to new designs and processes as opposed to new products. According to our empirical panel analysis, however, stock market investors find patent ownership of new product innovations the most valuable, although the intensity of patent ownership is not of utmost importance. Instead, we conclude patent quality is better able to explain variability in the stock market valuation of U.S. food and drink manufacturers. Specifically, a one-percent increase in the quality of patented innovations in food and drink products facilitates a 0.07 % increase in firm value, corresponding to almost $6 million for the mean innovating firm in the U.S. public food and drink industry.
期刊介绍:
The Journal of Agricultural & Food Industrial Organization (JAFIO) is a unique forum for empirical and theoretical research in industrial organization with a special focus on agricultural and food industries worldwide. As concentration, industrialization, and globalization continue to reshape horizontal and vertical relationships within the food supply chain, agricultural economists are revising both their views of traditional markets as well as their tools of analysis. At the core of this revision are strategic interactions between principals and agents, strategic interdependence between rival firms, and strategic trade policy between competing nations, all in a setting plagued by incomplete and/or imperfect information structures. Add to that biotechnology, electronic commerce, as well as the shift in focus from raw agricultural commodities to branded products, and the conclusion is that a "new" agricultural economics is needed for an increasingly complex "new" agriculture.